Disparate Cities is a special report by Inquilinxs Unidxs por Justicia that examines how housing policy — incentives, regulation, and deregulation — have created a socioeconomic underclass in the Twin Cities. This class includes people of all demographic makeups, but people of color, women, and renters are disproportionately represented. The report examines three strategies for redressing these wrongs and for creating a more democratic society: a tenants’ bill of rights, tenants’ unions, and housing cooperatives.

Tenants’ Bill of Rights

A tenants’ bill of rights gives tenants additional legal mechanisms to more evenly negotiate with their landlord, over applications, repairs, or displacement. “A tenants’ bill of rights is universal; it doesn’t explicitly outline policies that will support women, people of color, or other specific demographic groups. However, because it will help renters, it will also help lessen racial and gender inequalities.” Policy makers can advocate publically for a tenants’ bill of rights and be ready to explain how they can benefit all Minnesotans. Before writing a bill, they should consult with tenants and other stakeholders, as some Minneapolis City Council members have begun to do. Finally, they should pass the strongest tenant protections they can.

Tenants’ Unions

A tenants’ union is a structured association of tenants that allows for negotiating on a more even playing field with owners. Policy makers can help at a basic level by speaking positively and often of tenants’ unions. Policy should be enacted to fund enforcement when landlords deny their tenant’s their rights. This funding should include funds for tenant organizing of unions, one of the most efficient enforcement measures. Unions are the most effective tool for enforcing housing codes and combating run-away landlord profits, which, in Minneapolis, have been 60 percent or higher in some of the worst buildings.

Housing Co-ops

Housing Co-ops encompass multiple properties and are designed to keep housing permanently affordable and democratically controlled. In a co-op structure, rather than being tenants, residents are associates: they are business partners, neighbors, and creative collaborators. Associates of a co-op may organize a daycare, for example, or any other structure they choose that would allow them to meet their own needs, and are free to make their own decisions rather than being thrown about by an unaffordable market.

Lawmakers should talk publicly about the benefits of housing co-ops. A simple first step is to enact a right of first refusal so that tenants who wish to see their building become part of a co-op have that chance. (For example, Washington, DC, has the “Tenant Opportunity to Purchase Act”). Eventually, lawmakers should offer financial support to tenants wishing to buy into a co-op and to co-ops wishing to expand their housing stock.

So, where do we go from here?

If policies are informed by racial equity, the federal government would suppress predatory lending and fortify programs that provide affordable home mortgages and refinancing arrangements. Today, however, the Trump administration and Congress are gearing up to remove federal fair lending protections, and are making it easier to hide emerging patterns of predatory financing. In the long term, city and state government policymakers will have to find solutions to this, root out abuses in real estate lending, and close racial gaps in homeownership. In the short term, they will have to protect renters who cannot afford to own their own homes. Minnesota offers a way to do this.

Eric Hauge, Executive Director of Home Line, a non profit Minnesota tenant advocacy organization, explains that during almost every legislative session, there are bills introduced to cut or “reform” (negatively impact) the Minnesota renters credit. “Usually they target the percent used to calculate the portion of rent that went to property taxes, proposing to decrease it,” he says. Hauge reminds us that in 2019, there will be discussions about the need to conform to federal changes in tax law and that advocates will need to make sure the Renters Credit is transitioned through that process without significant reductions or changes to the populations targeted by the refund, and that provisions of Minnesota’s current Renters Credit program are maintained and perhaps even improved to best serve the needs of low-income communities of color, indigenous communities, and seniors.

As the Disparate Cities report states, “The problems facing renters have been decades in the making, they will not be solved with a one-time hand out to suppliers or consumers.” Non profit organizations, both urban and rural, state lawmakers, advocates, artists, and healers must work in collaboration to ensure that renters’ voices are heard in and throughout public policy.

This is a piece written in collaboration with Brett Grant (Voices for Racial Justice), Clark Biegler Goldenrod (Minnesota Budget Project), Roberto de la Riva (Inquilinxs Unidxs), and Eric Hauge (HOME line). It will be released in four parts over the next few weeks. Read part two here

Who Receives the Renters Credit?

In 2015, about 328,000 Minnesota households received the Renters Credit. Most households receiving the credit had incomes of around $31,000 or less.

According to the Minnesota Budget Project, the average amount of Renters Credit received in 2015 was $636. More than a quarter of the households receiving the Renters Credit included senior citizens and/or people with disabilities; for these households the average credit was $702. The share of households who receive the credit that include seniors or people with disabilities tends to be higher in Greater Minnesota. In 12 Greater Minnesota counties, at least half of the participating households included seniors and/or persons with disabilities.

Racial Equity Implications of the Renters Credit

In Minnesota, racial equity policies to eliminate socio-economic and racial disparities center around the belief that what we look like and where we come from should not determine the benefits, burdens, or responsibilities we bear in our society. Despite Minnesota’s reputation as one of the most progressive and thriving states in the country, we cannot escape the legacy of present and past discrimination. To reverse this legacy, numerous community organizations have adopted policy strategies grounded in racial equity, or “the development of policies, practices and strategic investments to reverse racial disparity trends, eliminate institutional racism, and ensure that outcomes and opportunities for all people are no longer predictable by race,” as a central part of their organizing principles.

A look at the racial composition of renters in Minnesota shows that almost three quarters of low-income black Minnesotans are renting. About 60 percent of people who identify as Ojibwe are renting. Half of low-income Hmong folks in Minnesota are renting, and 90 percent of low-income Somali Minnesotans are renting. For our purposes, we define people as being low-income if they are living at 200 percent of the federal poverty line or below. For example, a family of three with an income of $42,000 is living at 200 percent of the federal poverty line.

Table 1 – Selected Low-Income POCI Populations Living in Minnesota

Estimated Population Renting

Proportion Renting

Black Minnesotans

84,000

74 percent

Somali Minnesotans

16,000

90 percent

Hmong Minnesotans

10,000

48 percent

Mexican Minnesotans

34,000

60 percent

Ojibwe

8,000

58 percent

Lakota

1,300

53 percent

Race Equity Implications for Minnesotans with Children

The implications for many communities of color with children in Minnesota are similar. About 80 percent of low-income black Minnesotans who have children are renting, which translates to about 41,000 Minnesotans. Minnesotans from Mexico who have children are also likely renting in high numbers, about 21,000 Minnesotans.

Table 2 – Selected Low-Income POCI Families with Children Living in Minnesota

Estimated Population Renting

Proportion with Children Renting

Black Minnesotans

41,000

82 percent

Somali Minnesotans

9,000

91 percent

Hmong Minnesotans

6,000

53 percent

Mexican Minnesotans

21,000

62 percent

Ojibwe

3,700

69 percent

Lakota

700

64 percent

Race Equity Implications for Seniors

A look at the racial equity implications for seniors who are renting in Minnesota shows that most low-income senior Somali Minnesotans are renting. Close to 70 percent of low-income black seniors in Minnesota are renting, which is about 5,000 people. About half of Ojibwe seniors are renting. Over 60 percent of Hmong seniors are renting, and about 40 percent of Mexican seniors are renting.

This is a piece written in collaboration with Brett Grant (Voices for Racial Justice), Clark Biegler Goldenrod (Minnesota Budget Project), Roberto de la Riva (Inquilinxs Unidxs), and Eric Hauge (HOME line). It will be released in four parts over the next few week. Read part one here

Renters in Minnesota

Housing policies throughout Minnesota in the form of incentives, regulation, and deregulation, have created a socioeconomic underclass in the state. This class includes people of all demographic makeups, but people of color, women, and renters are disproportionately represented. If we are to help create a truly free and equal state through public policy, we must work to undo the power-imbalances that give rise to these disparities.

In Minnesota and across the country, since the collapse of the housing market, the economy has improved while the lives of people who are poor and working class have gotten worse. The disparities and power-imbalances in housing markets around the country were exacerbated by the Great Recession. Many of the homeowners who had been targeted by predatory lenders saw all equity in their homes evaporate nearly overnight, and were forced into the rental market. The earlier discrimination that locked women and people of color out of the housing market pushed them into the rental market and more recent discrimination locked them out of the prime mortgage market and pushed them into the rental market as well.

This discrimination of the past is reflected in cities such as Minneapolis. Female-headed households are more likely to be cost burdened than male headed households. Black-headed households are nearly twice as likely to be cost burdened as white-headed households. People who identify as LGBTQ are more likely to be homeless. Most federal money spent on housing goes to wealthy homeowners in the form of regressive tax credits. The subsidies that are available for renters are exclusively available for very low-income renters, mostly in the form of public housing and Section 8 vouchers, both of which have seen such massive disinvestment in recent years that only a small percentage of renters who qualify for these programs have access to them. Furthermore, in Minneapolis, private landlords may choose to accept Section 8 vouchers or not, and are free to stop accepting them at any time.

The Renters Credit

According to the Minnesota Budget Project, a research and advocacy organization that works towards a future where all Minnesotans have access to economic opportunities and well-being, the Renters Credit is a tax credit that refunds a portion of the property taxes that renters have paid through their rents. Tax refunds received through the Renters Credit help people who struggle to pay the bills, many of whom belong to communities of color and American Indian communities. Minnesotans report that when they receive this property tax refund, they use it to buy medicine or school clothes for their children, to catch up on bills, or for other basic needs. This spending in turn boosts our local economies.

While the Renters Credit is not a solution to the discriminatory housing practices and policies of the past, it is a tool that provides renters some financial relief and can perhaps offer a chance at more significant and long-term asset/wealth building. Below are a few portions of testimony prepared by HOME Line for one of the times they testified at the Minnesota Legislature about the renters credit:

As has been covered extensively, low-income renters are facing a difficult time with increased housing expenses, while other costs of living are increasing too. Many folks–especially seniors and people with disabilities–are on fixed incomes and are having difficulty making ends meet. That’s where the Renters Credit comes in—it makes a real difference in people’s lives when they receive their refund. Every year around this time (the landlords Certificate of Rent Paid (CRP) form is due to tenants by January 31) is when folks are applying for their refund, and we start hearing from renters across the state about the types of things they spend it on. And then the refund is timed perfectly for families with kids–it comes in mid to late August, when everyone is preparing for the start of school. It’s not uncommon that refunds are spent on clothes and supplies for the new school year, as well as childcare for younger siblings who aren’t off to school yet. One thing we’ve heard consistently is that the Refund goes towards basic needs. It’s almost exclusively spent within the nearby community on items that we all take for granted. We hear from seniors and families who spend their refunds on: